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If you've got the right people and the right data, you can pretty much rule the world.

Just ask Karl Ahlrichs.

The Business Learning Institute thought leader figured that out in one brief, brilliant article that combines the best of the people-first movement with the notion that a lot of our problems can be solved with access to better information.

In “Why CFOs mistrust HR, and how human capital financial statements will help,” Ahlrichs examines a new type of financial statement put forward by CFO magazine, one that focuses less on “soft” HR metrics and more on “the alignment of what is measured to the core mission of the organization.”

Here's an example: Tradition tells us that low employee turnover is a good thing, but is it really?

Ahlrichs's answer: It depends on which employees are leaving. If your worst employees are the ones headed out the door, that's good turnover. It all depends on context.

“I have often been puzzled by the willingness of HR departments to stick with meaningless metrics for decades,” Ahlrichs writes. “Measuring the speed of hiring rather than the quality of the new hires. Measuring the turnover rate, not the quality of what is leaving. Measuring the head count, not the productivity. Measuring participation, not behavior change.”

This really blows my mind. Books like “Humanize” and “Linchpin”¬†tell us that people must be our organizations' focal points going forward. XBRL tells us that if we can find ways to standardize our data, we can spend less time on data management and more time on solving really important problems.

Now, this notion of a “human capital financial statement” seems to combine people and data in a really powerful way.

“Human capital and talent management are differentiators of success and sources of competitive advantage,” Ahlrichs writes. “In a future world, human capital will finally be reported as a part of public financial statements. This will be big.”

The best information is more than mere numbers. It tells a story that helps us solve problems.

It was only a matter of time before the stories that information told circled back to our most important asset — our people.

Want to learn more?
Check out these other BLI programs from Karl Ahlrichs:

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